UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 96-2066
PLAY TIME, INC.,
Appellee,
v.
LDDS METROMEDIA COMMUNICATIONS, INC.,
a/k/a WORLDCOM, INC. OR WORLDCOM,
Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge]
Before
Torruella, Chief Judge,
Cyr, Senior Circuit Judge,
and Stahl, Circuit Judge.
Joan A. Lukey, with whom Anthony A. Scibelli and Hale and Dorr,
LLP were on brief for appellant.
Kenneth L. Kimmell, with whom Erin M. O'Toole and Bernstein,
Cushner & Kimmell, P.C. were on brief for appellee.
August 12, 1997
CYR, Senior Circuit Judge. Defendant-appellant
CYR, Senior Circuit Judge
WorldCom challenges a district court judgment awarding damages
for breach of its agreement to assign plaintiff-appellee Play
Time, Inc. ("Play Time") a toll-free "800" vanity number. We
affirm the district court judgment in all respects.
I
I
BACKGROUND1
BACKGROUND
WorldCom, a corporation with its principal place of
business in Jackson, Mississippi, and an office in Revere,
Massachusetts, provides subscribers with specialized long-
distance services, including toll-free "800" numbers.2 Pursuant
to industry standards, toll-free "800" numbers are stored in a
central database known as the 800 Service Management System
("SMS/800"). All "800" numbers are reserved and assigned to
subscribers by so-called Responsible Organizations ("RESP ORGs")
through SMS/800.
In March 1994, Play Time, a Massachusetts-based,
family-owned corporation engaged in selling art supplies, was
endeavoring to expand into nationwide telephonic networking aimed
at the commercial real estate leasing market. Michael Levosky, a
Play Time shareholder and co-manager, envisioned a nationwide
referral service through which potential customers could call a
1"We recite the facts as the jury and district court could
have found them." Roche v. Royal Bank of Canada, 109 F.3d 820,
821 (1st Cir. 1997).
2At the time of the relevant events, its corporate name was
LDDS Metromedia Communications, Inc.
2
toll-free "800" number and enter information into an automated
call router which would link the caller to a real estate office
near the place the caller wanted to lease commercial real estate.
Play Time would generate income from the fees charged real estate
brokers for their advertising and usage of the toll-free "800"
number.
To that end, Play Time set out to obtain a suitable
vanity number, one whose alphabetical counterpart conveyed a
business message readily identified and remembered by targeted
customers. Levosky decided to obtain 1-800-"367-5327" ("the
Number"), which would transpose as "FOR-LEAS[E]." WorldCom
advised Levosky that the Number, though not then in use, was
expected to become available a few weeks later, on or about April
20, 1994.3
Levosky called the WorldCom office in Revere,
Massachusetts, which handled other telephone business for Play
Time, and spoke with the "800" coordinator, Martha Burton, who
confirmed that the Number would become available in mid-April.
Burton assured Levosky that she would obtain the Number through
3The SMS/800 system records the status of all "800" numbers.
Normally, "800" numbers fall into one of five main categories:
"assigned," "working," "spare," "disconnect," or "unavailable."
After a subscriber advises that it no longer needs a particular
"800" number, the number is allowed to age for approximately six
months before reverting to "spare" status. Only numbers in
"spare" status are immediately available to the next subscriber.
A number in "spare" status is not assigned to any particular RESP
ORG, but can be assigned to a subscriber by any RESP ORG simply
by reserving it with SMS/800. Once an "800" number has been
assigned to a particular RESP ORG, however, no other RESP ORG can
control its status.
3
SMS/800 and assign it to Play Time once it attained "spare"
status.
On April 20, 1994, one week after WorldCom became the
RESP ORG for the Number, and the day the Number was to revert to
"spare" status, Levosky reminded WorldCom to assign the Number to
Play Time.4 Notwithstanding that WorldCom had been designated
the RESP ORG for the Number, however, it did not do so. Levosky
called WorldCom frequently between April 20 and May 10, 1994, to
ascertain why the Number had not yet been assigned to Play Time,
only to be told essentially that WorldCom was checking into it.
On May 11, 1994, Levosky called Joseph Shannon, a
senior account executive in WorldCom's Revere office, who assured
Levosky that the Number could be assigned to Play Time once the
appropriate paperwork had been completed. Levosky promptly
executed the required documents and returned them to Shannon the
same day; Shannon faxed them to the WorldCom RESP ORG office in
San Antonio on May 12.
Although the WorldCom fax machine in the Revere office
printed a receipt reflecting that the fax had been received in
San Antonio on May 12, when Shannon called the San Antonio office
on May 13 he was informed that the documents had never been
received. Once again Shannon faxed the documents. Although the
4Any RESP ORG may reserve a number in "spare" status
directly through SMS/800. The number is then "reported to" that
RESP ORG, in "reserve" status. At all times relevant to this
appeal, a number could remain in reserve status for up to 60
days. Thereafter, it automatically reverted to "spare" status
unless it had achieved "assigned" or "working" status.
4
second set of documents was received in San Antonio on May 13, as
confirmed by telephone, still the Number was not assigned to Play
Time. Shannon was told the delay was due to difficulty in
getting the Number released from SMS/800, notwithstanding the
fact that WorldCom was already the RESP ORG for the Number. But
see supra note 3.
Meanwhile, one Michael Eisemann had asked a WorldCom
office in Indiana to obtain the Number for his real estate
business. Eisemann intended to use the Number in a nationwide
referral system similar to that envisioned by Levosky. On May
20, 1994, approximately two months after Levosky first made a
verbal request for the Number and nine days after Levosky's first
written request, Eisemann submitted the order to the WorldCom
office in Indiana, with the required paperwork. Levosky's
earlier requests notwithstanding, WorldCom assigned the Number to
Eisemann, because its Revere office had never entered Play Time's
request into SMS/800.
Unaware that Eisemann had obtained the Number, Levosky
continued to inquire into its status. Although Levosky was told
there had been some delay due to paperwork problems, Shannon
advised him that the problems had been resolved and the Number
would soon be assigned to Play Time. On May 26, Levosky dialed
the Number to determine whether it would ring at Play Time's
office. The call was answered instead by an employee in a
Detroit, Michigan, maintenance office. Whereupon Levosky
contacted WorldCom, only to be informed that there had been a
5
computer "glitch."
Although WorldCom switched the Number to Play Time on
May 27, by May 31 it was once again ringing at the Detroit
maintenance office. The Number changed hands between Levosky and
Eisemann four more times between May 31 and June 2, ultimately
remaining with Eisemann. On June 2, Shannon tracked down the
Indiana sales representative responsible for assigning the Number
to Eisemann, and learned for the first time that Eisemann too had
requested the Number. After Shannon informed Levosky of the
problem, Levosky complained that WorldCom originally had
retrieved the Number from SMS/800 at his request, more than two
months earlier. Levosky then asked WorldCom to disconnect the
Number pending an investigation.
Shannon and his supervisor, Charles Hurd, approached
senior WorldCom management in the Revere office, urging that the
Number be returned to Play Time. Hurd informed Brady Buckley,
Vice President of sales for the eastern region, that the Number
had been taken from Play Time. Buckley asked Hurd how much money
the Number could be expected to produce. Hurd was unable to
answer the question. Buckley finally told Hurd: "F--- it[;]"
"leave it alone."
Upon learning that the Revere office was unable or
unwilling to assist him further, Levosky contacted Deborah
Surrette, WorldCom Vice President for the Northeast region. When
Levosky explained why the Number was so important to Play Time,
Surrette promised to investigate the matter and get back to him.
6
Surrette asked Kelle Reeves, director of customer provisioning
and RESP ORG, to determine whether WorldCom policy had been
followed in regard to the Number. After speaking with several
people, but without attempting either to contact the Revere
office or to ascertain which customer had first requested the
Number, Reeves simply concluded that WorldCom had complied with
industry guidelines requiring "800" numbers to be allocated on a
"first-come, first-served" basis, as Eisemann's request had been
the first to be entered into SMS/800.5
Levosky continued to urge WorldCom to return the Number
to Play Time, but was told that industry guidelines prohibited
its reassignment. See supra note 5. Levosky nevertheless
maintained that Play Time had been the first to request the
Number. WorldCom then altered course, explaining that its
relationship with Levosky was not controlled by industry
guidelines, which govern only the relationship between a RESP ORG
and SMS/800.
At that point, WorldCom wrongly represented to Levosky
that the problem had been caused by AT&T. According to WorldCom,
AT&T had been the RESP ORG for the Number on the date Play Time
requested it, but had released the Number to "spare" status
rather than assigning it to WorldCom. To the contrary, however,
AT&T was never the RESP ORG for the Number after 1993. Rather,
5Industry guidelines provide that: "Specific 800 Number
requests are honored based on availability, on a first-come,
first-served basis, at the time the reservation request is
initiated by a RESP ORG into SMS/800." Industry Guidelines for
800 Number Administration, 2.3.1 (Issue 3.0, December 1, 1993)
7
as we have noted, WorldCom itself had been the designated RESP
ORG since April 13, 1994.
Finally, WorldCom informed Levosky that the documents
he had submitted through Shannon, see supra p. 4, had not been
received by its San Antonio office until after the May 20th
request from Eisemann, even though a WorldCom employee in San
Antonio had confirmed receipt of the Levosky paperwork on May 13.
Play Time brought suit against WorldCom on November 9, 1994,
demanding damages and specific performance. Shortly after
Eisemann was named an indispensable party in relation to the
specific performance claim because he still controlled the
Number he changed long-distance carriers to prevent WorldCom
from returning the Number to Play Time.
Play Time then offered Eisemann an immediate $5,000
non-refundable deposit and an additional $45,000 following trial,
in return for the Number. At the same time, it offered to
dismiss its action against Eisemann if he would testify to the
value of the Number. Eisemann countered with a demand for a
$10,000 non-refundable deposit and $40,000 after trial. Their
negotiations ultimately fell through because Play Time could not
come up with the additional $5,000 non-refundable deposit.
Eisemann nevertheless testified at trial that the
Number did have inherent value, explaining that "people would buy
the [vanity] number for [its] potential value." He produced a
pamphlet he had developed for marketing the Number, touting the
importance of vanity numbers in reaching potential customers.
8
Although Eisemann acknowledged that he was motivated to enter
into an agreement with Levosky in part because he wanted to get
Levosky "out of his hair," he consistently maintained that the
Number had inherent value.
The jury returned verdicts for Play Time on all counts,
awarding $50,000 in damages on each count, representing the value
of the Number under a "willing-transferor-willing-transferee"
standard. The total award was limited to $50,000, however,
because the jury determined that recovery under more than one
count would be redundant.
At a later hearing, the presiding judge found that
WorldCom had violated Mass. Gen. Laws ch. 93A, 11, which affords
civil relief from unfair or deceptive business practices. The
court determined WorldCom's conduct both unfair and deceptive,
and held that it had occurred "primarily and substantially"
within Massachusetts. Accordingly, the court trebled the $50,000
damages award made by the jury, see Mass. Gen. Laws ch. 93A, 11
(1984), and awarded attorney fees and costs under Mass. Gen. Laws
ch. 93A and the Federal Communications Act. Finally, the
equitable claim for specific performance was dismissed as moot.
WorldCom promptly appealed from the $233,334.84 judgment.
II
II
DISCUSSION
DISCUSSION
1. Jury Instructions and Verdict Form
1. Jury Instructions and Verdict Form
WorldCom claims the district court erred in instructing
the jury to apply a "willing-transferor-willing-transferee"
9
standard for measuring damages. It maintains that "800" numbers
are without inherent value as a matter of law, since it would
violate industry guidelines and public policy to allow telephone
numbers to be bought and sold on the open market.
Throughout the trial, Play Time made it very clear that
it was demanding the value of the Number. Early on, the district
court set itself to the task of articulating an appropriate
measure of damages. WorldCom voiced no objection to the district
court's proposed articulation of the measure of damages until
after the close of the evidence. At that time, its trial counsel
offered two cursory observations.
First, WorldCom stated that the measure of damages on
the negligence claim should be different from that on the
contract claim. Its second observation appears in the following
exchange:
WorldCom: Your Honor, just for the record, I
haven't made any comments on the willing-
assignor-willing-assignee theory. I just
wanted to reflect what the record so far
reflects, that by not making any comments on
it, I don't adopt it as --
The Court: Well, you'll have the opportunity
to make objection.
WorldCom: Yes.
The Court: But if you've got any alternative
way of dealing with this matter, of course I
want to hear it now.
WorldCom: Right. I don't think I do other
than simply to ask you to instruct the jury
in accordance with my requested instruction
on damages, and I expect that's what I'll
simply do after closings. (Emphasis added.)
10
The record on appeal neither contains a proposed instruction by
WorldCom nor reflects the grounds for its objection to the
instruction given by the district court.
The special verdict form included a statement of the
issues relating to the "willing-transferor-willing-transferee"
standard, as follows:
1(c). What amount of money, if any, do you
find to be fair and reasonable compensation,
of each of the following types, for . . .
breach . . . of contract? Answer in DOLLARS
or NONE.
(1) Reimbursement of losses proved by a
preponderance of the evidence to have been
out-of-pocket expenses.
(2) Fair market value (as valued by the
willing-transferor-willing-transferee stan-
dard) of a transfer, by Eisemann to Play
Time, on or about September 21, 1995, of
Eisemann's rights to use the number 800-367-
5327.
The same formula was used for the contract, negligence, and
Federal Communications Act claims.
The presiding judge explained the "willing-transferor-
willing-transferee" standard to the jury as follows:
The willing transferor and willing
transferee are hypothetical persons created
by the law to help us decide questions of
valuation in circumstances in which no real
persons have arrived at an exact value for
the property or property rights at issue.
You, as decisionmakers on this question of
value, are directed to envision not the usual
arm's-length transactions between real-life
bargainers, but instead a transaction of the
hypothetical variety - indeed of a contrary
to fact variety. If the reality is that in
human experience a property interest exactly
like that transferred in this case has not
been transferred in an arm's-length
11
transaction between real people, you must
imagine a transaction not exactly like any
transaction described in the evidence before
you.
These hypothetical persons, the willing
transferor and willing transferee, always
come to an agreement. They never end their
negotiations in failure. They always arrive
at a value they both agree upon.
The aim of factfinding by using this
willing-transferor-willing-transferee
standard is to help you evaluate the parties'
evidence, and their arguments about evidence
and about formulas and figures, and about
other factors in evidence that bear upon the
issue of value. You are to do your
evaluation in the way you find the willing
transferor and willing transferee would
evaluate the same factors and arguments.
To these persons different formulas
suggested by opposing parties are not
binding. They are only tools. The willing
transferor and willing transferee do not
overlook relevant evidence. They weigh every
relevant factor. They are not experts, but
they are attentive to expert advice. But in
the end they make a pragmatic decision that
enables them to come to a common value after
evaluating all of the evidence and arguments
before them.
After the jury charge had been delivered, the presiding
judge invited objections to the charge and the special verdict
form. At that point, WorldCom simply registered its objection to
the "instruction on the measure of damages" relating to the
"willing-transferor-willing-transferee" standard. The district
court overruled the objection.
Objections to jury instructions are governed by Fed. R.
Civ. P. 51, which provides in relevant part that "[n]o party may
assign as error the giving or the failure to give an instruction
12
unless that party objects thereto before the jury retires to
consider its verdict, stating distinctly the matter objected to
and the grounds of the objection." Fed. R. Civ. P. 51 (emphasis
added). We have "consistently held that the strictures of Rule
51 must be followed without deviation." Smith v. Massachusetts
Inst. of Tech., 877 F.2d 1106, 1109 (1st Cir. 1989). See also
Kerr-Selgas v. American Airlines, Inc., 69 F.3d 1205, 1213 (1st
Cir. 1995).6
Assignments of error duly preserved pursuant to Rule 51
are subject to the "harmless error" regime set out in Rule 61,
which requires the reviewing court to "disregard any error or
defect in the proceeding which does not affect the substantial
rights of the parties." Fed. R. Civ. P. 61.7 Absent strict
compliance with Rule 51, however, appellate challenges to a jury
charge or verdict form cannot succeed unless the assigned error
"caused a miscarriage of justice or . . . undermined the
integrity of the judicial process." Scarfo v. Cabletron Systems,
6The Rule 51 standard applies to the jury charge and any
special verdict form. See Transamerica Premier Ins.Co. v. Ober,
107 F.3d 925, 933 (1st Cir. 1997); Clausen v. Sea-3, Inc., 21
F.3d 1181, 1195-96 (1st Cir. 1994).
7WorldCom insists that the jury instruction must be reviewed
de novo. Although we exercise "independent judgment in
evaluating the legal correctness of the district court's jury
instructions," Data General v. Grumman Systems Support, 36 F.3d
1147, 1159 (1st Cir. 1994), and may review the special verdict
form for abuse of discretion, see Transamerica Premier Ins. Co.
v. Ober, 107 F.3d 925, 933 (1st Cir. 1997), a party which has
complied with Rule 51 nonetheless must show that the assigned
error affected "substantial rights," see Fed. R. Civ. P. 61,
whereas a party which has not complied with Rule 51 must
demonstrate a "miscarriage of justice." See Scarfo v. Cabletron
Systems, Inc., 54 F.3d 931, 940 (1st cir. 1995).
13
Inc., 54 F.3d 931, 940 (1st Cir. 1995); see also Lash v. Cutts,
943 F.2d 147, 152 (1st Cir. 1991) ("Absent timely objection, an
erroneous jury instruction warrants a new trial only in the
exceptional case where the error seriously affected the fairness,
integrity or public reputation of judicial proceedings."
(internal quotation marks omitted)); Elwood v. Pina, 815 F.2d
173, 176 (1st Cir. 1987). The latter standard "plain error"
see Transamerica Premier Ins. Co. v. Ober, 107 F.3d 925, 933
(1st Cir. 1997); Kerr-Selgas, 69 F.3d at 1213; Elgabri v. Lekas,
964 F.2d 1255, 1259 (1st Cir. 1992); Elwood, 815 F.2d at 176,
"'is near its zenith in the Rule 51 milieu.'" Clausen v. Sea-3,
Inc., 21 F.3d 1181, 1196 (1st Cir. 1994) (quoting Toscano v.
Chandris, S.A., 934 F.2d 383, 385 (1st Cir. 1991)).
Rule 51 requires a punctual objection identifying
"distinctly the matter objected to and the grounds of the objec-
tion." Fed. R. Civ. P. 51 (emphasis added). Here, however,
WorldCom interposed no record objection to the special verdict
form, as distinguished from the jury charge defining "the measure
of damages." Moreover, WorldCom articulated no grounds
whatsoever for its objection to the special verdict form or the
jury charge. Failure to object with the requisite
particularity forfeits review under the "harmless error" rule.
See Scarfo, 54 F.3d at 944; Linn v. Andover Newton Theological
School, Inc., 874 F.2d 1, 5 (1st Cir. 1989); Elwood, 815 F.2d at
175-76; New York, N.H. & H.R. Co. v. Zermani, 200 F.2d 240, 245
(1st Cir. 1952). Consequently, appellate review is limited to
14
determining whether a miscarriage of justice would occur were the
asserted error not corrected. See Scarfo, 54 F.3d at 940.
WorldCom can demonstrate no miscarriage of justice.
First, the "fair market value" standard defined by the
district court, see supra pp. 11-12, provided the jury with a
just and reasonable measure of damages under Massachusetts law in
these circumstances. See Mechanics Nat'l. Bank of Worcester v.
Killeen, 384 N.E.2d 1231, 1239 (Mass. 1979) (holding, in action
for breach of contract caused by wrongful foreclosure and sale of
shares of stock, plaintiff was "entitled to recover the fair
market value of the stock at the time of its sale"); Hall v.
Paine, 112 N.E. 153, 155 (Mass. 1916) (holding that "fair market
value" was proper measure of damages for stock broker's breach of
margin agreement caused by sale of plaintiff's shares without
authorization; noting that, generally speaking, fair market value
is proper measure of damages for breach of contract relating to
sale of goods which have an ascertainable value on the market).
Thus, at the very least, the "fair market value" standard
articulated by the district court effectively foreclosed
WorldCom's claim of error under the "plain error" ("miscarriage
of justice.") standard.8 The failure [to] instruct the jury on a
8Under the harmless error rubric, trial court error affects
"substantial rights" only if it results in substantial prejudice
or has a substantial effect on the outcome of the case. See
Lataille v. Ponte, 754 F.2d 33, 37 (1st Cir. 1985) (defining
harmless error, in context of challenge to admission of evidence,
as "whether we can say 'with fair assurance ... that the judgment
was not substantially swayed by the error'" (quoting United
States v. Pisari 636 F.2d 855, 859 (1st Cir. 1981)) (alteration
in original)). See also 12 JAMES WM. MOORE ET AL., MOORE'S
15
measure of damages other than the fair market value cannot meet
either standard, however, especially since the challenged
instruction outlined a fair and reasonable measure of damages,
and no other standard was proposed below.
WorldCom misses the mark with its argument that the
Number had no market value because its sale, brokering, barter,
or release for a consideration was prohibited.9 Quite the
FEDERAL PRACTICE 61.02[2] (3d ed. 1997). In order to satisfy
the "plain error" standard of review ("miscarriage of justice"),
however, an appellant must show "more than the simple
individualized harm which occurs whenever a litigant's failure to
object . . . alters the outcome of a trial." 9 MOORE'S FEDERAL
PRACTICE 51.21[2]. Among the factors to be considered are:
whether the failure to raise the claim below deprived the
reviewing court of helpful factfinding; whether the issue is one
of constitutional magnitude; whether the omitted argument is
highly persuasive; whether the opponent would suffer any special
prejudice; whether the omission was inadvertent or deliberate;
and, perhaps most importantly, whether the issue is of great
importance to the public. See National Ass'n of Social Workers
v. Harwood; 69 F.3d 622, 627-28 (1st Cir. 1995) ("legislative
immunity" defense considered on appeal despite failure to raise
it below). See also 9 MOORE'S FEDERAL PRACTICE 51.21[2]. Our
case, which implicates only the question of damages for breach of
a private agreement between the litigants, presents no issue of
great public importance or constitutional magnitude; the Harwood
factors, therefore, weigh in favor of Play Time. Nor does the
present case implicate the integrity of the judicial process, as
the proceedings below were conducted with meticulous attention to
the rights of both parties. See Scarfo, 54 F.3d at 940.
9The relevant industry guideline provides:
800 numbers are not to be treated as
commodities which can be bought or sold and
no individual or entity is granted a
proprietary interest in any 800 number
assigned. RESP ORGs and 800 Service
Providers are prohibited from selling,
brokering, bartering, or releasing for a fee
(or other consideration) any 800 number.
Reserving, Assigning, or activating
(Working) 800 Numbers by RESP ORGs, 800
Service Providers, or Customers for the
16
contrary, the pertinent Industry Guideline explicitly
acknowledges the ultimate right of "800 Service End-User
Subscriber[s] . . . to control their 800 Service, and their
reserved, active, or assigned 800 Service Numbers." Industry
Guidelines for 800 Number Administration 2.2.1, 3 (Issue 3.0,
December 1, 1993).10 Instead, industry guidelines prohibit only
RESP ORGs and "800" Service Providers from trading "800" numbers
for valuable consideration. Id. 2.2.1, 1. Subscribers, on the
other hand, are prohibited only from obtaining "800" numbers for
the primary purpose of trading in them. Id. 2.2.1, 2.
Thus, industry guidelines did not impede, let alone
foreclose, a jury finding that the right to control the Number
had inherent value in the marketplace. Consequently, WorldCom
failed to establish that any right to use the Number was
valueless as a matter of law, let alone that any "error seriously
affected the fairness, integrity or public reputation of judicial
primary purpose of selling, brokering,
bartering, or releasing for a fee (or other
consideration) that 800 Number is prohibited.
However, the 800 Service End-User Sub-
scriber has the ultimate right to control
their 800 Service, and their reserved,
active, or assigned 800 Service Numbers.
Industry Guidelines for 800 Number Administration 2.2.1 (Issue
3.0, December 1, 1993).
10Similarly, the WorldCom tariff provided that subscribers
have "no ownership interest or proprietary right in any
particular 800 number," but explicitly stated also that "upon
placing a number actually and substantially in use . . .
[WorldCom] 800 Service Customers do have a controlling interest
in this [sic] 800 number(s)." Tariff F.C.C. No. 2, C.3.3.3
(February 7, 1994).
17
proceedings." Lash, 943 F.2d at 152 (internal quotation marks
omitted).
2. Judgment as a Matter of Law11
2. Judgment as a Matter of Law
WorldCom also challenges the district court ruling
denying its motion for judgment as a matter of law. See Fed. R.
Civ. P. 50. It assigns two errors: (i) Play Time failed to
establish recoverable damages, and (ii) sustained no damages from
any WorldCom negligence. As WorldCom maintains that Play Time
failed to prove to a reasonable certainty that it sustained any
damages as a result of its failure to assign the Number to Play
Time, we must inquire whether Play Time presented enough evidence
to enable a reasonable jury to determine, to the requisite degree
of certainty, the value of the Number.12
Our inquiry is guided by Massachusetts law:
The fundamental principle of law upon which
damages for breach of contract are assessed
11Appellate challenges under Rule 50 face a formidable
hurdle:
Review of [a] denial of a motion for judgment
as a matter of law is plenary. . . . [W]e
review the record in the light most favorable
to the non-moving party. We will reverse the
denial of such a motion only if reasonable
persons could not have reached the conclusion
that the jury embraced.
Ansin v. River Oaks Furniture, Inc., 105 F.3d 745, 753 (1st Cir.
1997) (internal quotation marks omitted), petition for cert.
filed, 65 U.S.L.W. 3839 (U.S. June 10, 1997) (No. 96-1969).
12WorldCom resurfaces its jury instruction challenge that
the Number had no inherent value, see supra p. 9; hence, Play
Time established no recoverable damages. As the Number was not
valueless as a matter of law, see supra pp. 16-17, its claim must
be rejected in the present context as well.
18
is that the injured party shall be placed in
the same position he would have been in, if
the contract had been performed, so far as
loss can be ascertained to have followed as a
natural consequence and to have been within
the contemplation of the parties as
reasonable men as a probable result of the
breach, and so far as compensation therefor
in money can be computed by rational methods
upon a firm basis of facts . . . .
John Hetherington & Sons, Ltd. v. William Firth, Co., 95 N.E.
961, 964 (Mass. 1911). See also Hendricks & Assocs., Inc. v.
Daewoo Corp., 923 F.2d 209, 213 (1st Cir. 1991) (applying
Hetherington). Thus, it was incumbent upon Play Time to
establish a firm evidentiary foundation for the damages claimed,
leaving no essential element to "'conjecture, surmise or
hypothesis." Snelling & Snelling of Mass. Inc. v. Wall, 189
N.E.2d 231, 232 (Mass. 1963) (quoting Hetherington, 95 N.E. at
964). See also Air Safety, Inc. v. Roman Catholic Archbishop of
Boston, 94 F.3d 1, 4 (1st Cir. 1996); Hendricks, 923 F.2d at 217.
Ample record evidence supported the $50,000 valuation.
Eisemann testified, based on his considerable experience in the
real estate leasing field, that the Number, like other vanity
numbers, had inherent value for which would-be users were willing
to pay. In addition, Eisemann and Levosky testified to their
efforts to close the deal whereby Levosky was to acquire from
Eisemann the right to use the Number at the agreed $50,000 price.
Although their deal could not be consummated, it was not due to
their inability to agree on value: Levosky offered $50,000 for
the Number; Eisemann was amenable to accepting $50,000, but
wanted a larger downpayment, which Play Time was unable to
19
manage.
WorldCom focuses on an admission by Eisemann that he
was motivated, in part, to release his rights to the Number in
order to get Levosky, who had named him as a party defendant in
the lawsuit, "out of his hair." WorldCom relies also on a letter
from Play Time's counsel to Eisemann, which provided in relevant
part:
My client, Play-Time, offers to enter into an
option agreement whereby Play-Time pays you
(or the entity that controls the Number, if
different from you), $5000.00 for the option
to purchase the right to use the Number for a
total of $50,000.00 (i.e., $45,000.00 plus
the $5000.00 down payment). In addition,
Play-Time would waive its claims against you
for specific performance, in exchange for
your full cooperation in providing credible
testimony as to the fair market value of the
Number, the details of which can be worked
out later.
(Emphasis added.) WorldCom argues that this letter makes it
clear that at least a portion of the $50,000 agreed upon by
Eisemann and Levosky represented the value of Play Time's
agreement to drop its lawsuit against Eisemann.
Although WorldCom proposes an entirely reasonable
interpretation, another is that the letter memorializes two
distinct offers: the first to pay a total of $50,000 for
Eisemann's rights in the Number; the second to drop the claims
against Eisemann in exchange for Eisemann's trial testimony as to
the value of the Number. Thus, the WorldCom contention that the
$50,000 figure had not been based entirely on the value of the
Number did not preclude a reasonable jury finding to the
20
contrary. Accordingly, we conclude that the evidence on damages
was adequate to withstand the WorldCom motion for summary
judgment, and that the district court committed no error in
submitting the case to the jury.13
3. Mass. Gen. Laws ch. 93A, 11
3. Mass. Gen. Laws ch. 93A, 11
Finally, WorldCom contends that the district court
erred in awarding Play Time treble damages under Mass. Gen. Laws
ch. 93A, 11. Chapter 93A generally proscribes "[u]nfair
methods of competition and unfair or deceptive acts or practices
in the conduct of any trade or commerce." Mass. Gen. Laws ch.
93A, 2 (1984). An unfair or deceptive practice between
businesspeople is not actionable under section 11 unless "the
actions and transactions constituting the alleged unfair method
of competition or the unfair act or practice occurred primarily
and substantially within the commonwealth." Mass. Gen. Laws ch.
93A, 11 (West Supp. 1996). WorldCom contends that any unfair
action in this case did not occur "primarily and substantially"
within Massachusetts.
The trial court findings on the "nature, extent, and
place of performance" of WorldCom's actions are reviewed for
clear error only. Clinton Hosp. Ass'n. v. Corson Group, Inc.,
907 F.2d 1260, 1264 (1st Cir. 1990). On the other hand, the
13Alternatively, WorldCom homes in on the Play Time
negligence claim, arguing that there can be no recovery for
negligence unless Play Time sustained injury to its "person" or
property. We need not discuss this argument, however, as the
$50,000 damages award is sustainable simply on the breach of
contract claim. See, e.g., Hubbard v. Faros Fisheries, Inc., 626
F.2d 196, 201 n.3 (1st Cir. 1980); see also supra pp. 8-9.
21
district court's ruling that WorldCom failed to carry its burden
of proving that its conduct "primarily and substantially"
occurred outside Massachusetts, see Mass. Gen. Laws ch. 93A, 11,
raises a question of law for de novo review. Roche v. Royal Bank
of Canada, 109 F.3d 820, 829 (1st Cir. 1997); see also Clinton
Hosp., 907 F.2d at 1264.
In determining that WorldCom's actions were unfair and
deceptive, the district court focused especially on the conduct
of Joseph Shannon, which it considered entirely appropriate but
for WorldCom's extant agreement with Levosky. The court also
relied on the testimony of Charles Hurd, Shannon's supervisor,
who expressed the view that WorldCom management had mistreated
Play Time. Finally, the court identified the off-color remark by
Brady Buckley, see supra p. 6, as "perhaps the most dramatic
demonstration of [WorldCom]'s thumb-their-nose attitude." As the
district court determined, all these actions took place entirely
within Massachusetts. The district court further found that the
investigation conducted by Deborah Surrette and Kelle Reeves
amounted to mere "window dressing," thereby enhancing the
deceptiveness and unfairness to Play Time.
WorldCom mounts no serious challenge to these district
court findings. Instead, it argues that most of the allegedly
unfair and deceptive conduct took place outside Massachusetts.
In particular, it accurately points out that the Number was
assigned to Eisemann by a salesperson in Indiana and that the
ultimate decision to allow Eisemann to retain the Number was made
22
in New Jersey.
The Supreme Judicial Court has outlined a "pragmatic,
functional approach," Roche, 109 F.3d at 829; see also Makino,
U.S.A., Inc. v. Metlife Capital Credit Corp., 518 N.E.2d 519,
523-24 (Mass.App.Ct. 1987), further app. rev. denied, 521 N.E. 2d
398 (Mass. 1988), for determining whether alleged misconduct
occurred "primarily and substantially" in Massachusetts. See
Bushkin Assocs., Inc. v. Raytheon Co., 473 N.E.2d 662, 672 (Mass.
1985).14 Its approach has been distilled into three principal
inquiries: "(1) where the defendant committed the deception; (2)
where plaintiff was deceived and acted on the deception; and (3)
the situs of plaintiff's losses due to the deception." Roche,
109 F.3d at 829; see also Clinton Hosp., 907 F.2d at 1265-66;
Bushkin, 473 N.E.2d at 672. As we noted in Clinton Hospital,
however, in approaching the second Bushkin inquiry the location
of the person to whom the deceptive statements are made is of
special significance, as distinguished from the location of the
person who uttered the deceptive statements, since "[t]he
victim's ingestion of a deceptive statement and the subsequent
effects from reliance on it are what give the deceptive statement
its venomous sting." Clinton Hosp., 907 F.2d at 1265-66.
The district court analyzed only the first Bushkin
14Although Bushkin construed the operative language
"primarily and substantially" in the context of Mass. Gen.
Laws ch. 93A, 3(1)(b)(i), as appearing in St.1967, c. 813, see
Clinton Hosp., 907 F.2d at 1264, ch. 93A, 11 uses the identical
language. See id. Accordingly, we have applied the Bushkin
factors to 11 as well. See id.; see also Roche, 109 F.3d at
829-31 (referring to "Clinton Hospital factors").
23
factor, finding that the conduct on which it focused in
particular, the actions of Joseph Shannon and Brady Buckley, see
supra pp. 4-6 all took place in Massachusetts. We have
explained, however, that the first Bushkin factor is the least
weighty. Roche, 109 F.3d at 829; see also Compagnie Reassurance
d'Ile de France v. New England Reinsurance Corp., 57 F.3d 56, 90
(1st Cir.), cert. denied, 116 S. Ct. 564 (1995); Clinton Hosp.,
907 F.2d at 1265-66. Although we agree with the district court,
other weightier factors cut against WorldCom as well. All the
unfair or deceptive statements made by WorldCom's agents were
visited upon Play Time in Massachusetts. It was there that
Levosky dealt with Joseph Shannon; learned that WorldCom's Revere
office would not try to retain the Number for Play Time because
Buckley believed any potential revenues were inconsequential;
learned the results of Surrette's superficial investigation; and
was provided with the numerous pretexts by WorldCom for not
obtaining the Number for Play Time.
WorldCom, on the other hand, misplaces primary reliance
on the location of the WorldCom agents who made the ultimate
adverse decision (Surrette and Reeves in New Jersey), and the
WorldCom sales office (Indiana) which obtained the Number for
Eisemann. But the district court did not find the actions of the
Indiana sales agent part and parcel of WorldCom's unfair or
deceptive conduct.15 Moreover, as we have noted, the first
15Similarly, WorldCom's Indiana agent would not have been
able to assign the Number to Eisemann had WorldCom's
Massachusetts employees followed through on the commitment to
24
Bushkin factor is the least weighty. Finally, the location of
Surrette and Reeves is insufficient to overcome the competing
evidence which must be weighed under the other Bushkin factors
including Levosky's receipt of the results of the Surrette and
Reeves "investigation" in Massachusetts all of which indicates
that the unfair and deceptive behavior took place primarily and
substantially within Massachusetts. Thus, WorldCom failed to
carry its burden of proving that the Chapter 93A claim was not
actionable.
III
III
CONCLUSION
CONCLUSION
As we conclude that all contentions raised by WorldCom
on appeal were waived or meritless, the district court judgment
is affirmed. Costs are awarded to Play Time.
SO ORDERED.
SO ORDERED.
Play Time. See supra p. 5 (Indiana agent able to obtain the
Number only because Revere agents failed to enter Play Time's
order in computer).
25